Airbus unlocks Emirates A380 logjam but engine standoff goes on

Airbus delivered one A380 in mid-November, with the second scheduled to arrive in Dubai next week, inching the planemaker toward its goal of handing over 800 jetliners this year

By Bloomberg

Sat 01 Dec 2018 01:55 PM

Airbus SE resumed handovers of its A380 superjumbo to Dubai-based Emirates, boosting its chances of meeting year-end targets while leaving concerns about longer-term deliveries to the Gulf giant unresolved.

Of two planes declared ready for shipping at the time of Airbus’s earnings update on Oct. 31, one was finally delivered in mid-November, the Toulouse, France-based company said Thursday. The second should arrive next week, inching the planemaker toward its goal of handing over 800 jetliners this year.

Airbus cautioned last month that its ability to meet targets was reliant on factors including commercial challenges in dispatching completed A380s. Other hurdles include clearing a backlog of single-aisle A320s held up by engine issues, production hiccups in Hamburg, and a freeze on A330 wide-body handovers to China’s cash-strapped HNA Group.

A dispute between Emirates and its A380 engine-provider Rolls-Royce Holdings Plc regarding turbines for 20 double-deckers ordered in January -- in which current deliveries had become a bargaining chip -- has yet to be resolved.

Rolls initially scooped an order to build engines for 50 aircraft through heavy discounting and a commitment to reducing fuel consumption. With the A380 failing to garner further major orders elsewhere, the U.K. manufacturer has been reluctant to throw cash at the program, leading to the current standoff.

Emirates declined to comment and Rolls-Royce didn’t immediately respond when contacted by Bloomberg.

Airbus is targeting 12 A380 deliveries this year and had handed over eight by the end of October, including four to Emirates. The manufacturer is relying on the follow-on order for 20 jets to eke out superjumbo production until 2029.